VIETNAM Law and Practice Contributed by: Adam Moncrieff and Thuy Huynh, Orrick
5.5 Monopoly Rights for Electricity Distribution Entities
For that reason, it is not usually relevant to raise a question on the process for a private proponent seek- ing to operate public distribution facilities. Where a distribution licence is issued, the terms are mainly regulatory and technical. They are not typically nego- tiated commercial conditions. 5.4 Eminent Domain, Condemnation or Expropriation Rights to Construct and Operate Electricity Distribution Facilities As mentioned above, while a distribution licence is possible under Vietnamese law, the practical market position remains that EVN undertakes public distribu- tion, and private participation is exceptional and lim- ited in scope. This is important because land access issues for public distribution projects usually arise in the context of EVN or grid development backed by the state, rather than private utility franchises. Land access is handled through the state land regime. This may involve land allocation, land lease, route approvals, agreements with land users, electricity safety corridors, or state land recovery where the pro- ject qualifies. For EVN and other state-backed grid projects, land recovery is carried out by the compe- tent state authority, not by the project owner directly. The competent authority approves the land recovery and the compensation, support and resettlement plan.
Public electricity distribution in Vietnam is effectively controlled by EVN, a state-owned enterprise, through its regional power corporations. Non-EVN distribution exists only in limited settings and should not be treat- ed as evidence of a liberalised distribution market. Vietnamese law does allow distribution and retail licences within defined scopes. However, that does not mean there is an open market for competing dis- tribution utilities. In practical terms, EVN remains the public distribution monopoly. 5.6 Electricity Distribution System Charges and Terms of Service Electricity distribution charges and retail terms are state-regulated. EVN and its power corporations apply tariffs set under the national electricity pricing frame- work. They do not freely negotiate distribution charges with ordinary customers. The Prime Minister sets the tariff structure and price bracket. The Government sets the mechanism for adjusting the average retail electricity price. The MOIT supervises and approves key pricing matters. EVN calculates and implements price adjustments under that framework. This is not a public rate-case model. It is a regulated tariff model based on electricity sector costs, includ- ing generation, transmission, distribution, retail, sys- tem operation and regulated profit.
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